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Notary Public Ethical Issues Related to Structured Settlement Work

by John Darer CLU ChFC MSSC CeFT RSP CLTC

What is a Notary Public? 

A notary public is often called upon to witness and notarize signatures on personal injury settlement documents. According to National Notary, a notary public is "an official of integrity appointed by state government —typically by the secretary of state — to serve the public as an impartial witness in performing a variety of official fraud-deterrent acts related to the signing of important documents".

Structured Settlement Factoring Companies Are Using Notaries as a Source of Poaching Leads

One of the tenets of the code of ethics of the American Society of Notaries is "To not use the office of notary public as a means of financial gain, for myself or others, in any other business or profession".

On a recent matter concluded during the Covid-19 pandemic, a mobile notary public was contacted to witness and notarize documents related to a confidential settlement of a personal injury case involving a special needs plaintiff. While at the plaintiff's home to notarize the subject settlement documents,the notary public mentioned that she knew of someone who "could get the client more money" and called a representative of a structured settlement factoring company from another state. It was clear that there was a misunderstanding by the notary that the plaintiff was selling structured settlement payments.  But given that the role of a notary is to simply witness and notarize signatures and not solicit business for third parties, it puts the integrity of the notary in question.

The thought that a notary public is initiating and/or facilitating the distribution of confidential information that could jeopardize the confidentiality clause in a settlement agreement that he or she is witnessing and notarizing and violating a tenet of the notary profession, gives me pause for concern and reason to blast this loud warning to trial lawyers, plaintiffs and guardians.

Indeed the issue of integrity of notary publics has been raised by me before in relation to the poaching of structured settlement factoring deals.

Structured Settlement Secondary Market Sleaze | Notary Repeatedly Deceives Clients for Client's Competitor  July 20, 2016

Notaries Getting Paid Off by Cash Now Pushers | Is It Ethical or Legal?  May 6, 2014

The structured settlement factoring representative referred by the Mobile Notary Public has been doing exactly what factoring companies do, soliciting, calling multiple times a week and emailing the client, using the guise of "help with the details of your annuity" and "annuity protection service". The factoring representative was already told that the payments could not be sold.

When I checked the subject individual did not hold an insurance license the plaintiff's state, was not registered with FINRA, or as an investment adviser with the SEC, according to the IAPD database and had no Linkedin profile. The subject individual had a website registered anonymously that displayed no address. Not exactly something that inspires any confidence. 

 

 

 

 

 

 

 

Structured Settlement Protection Act | How to Cure Forum Shopping in Florida

by Structured Settlement Watchdog

In my opinion the Florida structured settlement transfer laws need to be changed to eliminate forum shopping.  Here are some changes that I believe should be made to the law in Florida.

1. Require that petitions for structured settlement transfers be filed in the jurisdiction in which the annuitant resides as opposed to any court in the State of Florida.  For example, Sumter County can only be a venue for Sumter County residents.  Brings Florida consistent with the structured settlement protection acts of other states.

2. Require proof that the petitioner/seller has resided in that Florida county for a minimum of 12 months

Read The Sumter County Factoring Forum Shop? October 21, 2013. A time limit needs to be set far enough out so that someone can't come down to Florida for a couple of days or weeks and create the illusion of domicile with the assistance of the settlement purchaser.

I also interiewed a young man from North Carolina, which has a discount rate cap and he claims to have been forum shopped into Florida with the transfer petition using as the address of "domicile" the address of his grandmother who he had not visited in over 20 years.  He claims the settlement purchaser also inveigled a "friend relative" to receive payment for his expense money (ostensibly to cover the tracks so there would be no trace of payment to a North Carolina resident).

3. Impose stiff punishment for anyone who is caught violating the law.

4. Require an in-person review by a judge.

and further, to protect Florida citizens

5. Require that any company engaged in structured settlement factoring transactions, with residents of the State of Florida, be registered with the Florida Secretary of State and have all filings current. Said requirement would include a disclosure of all DBAs.

Registrations should require the address where the company conducts its operations as opposed to a UPS store mailbox, P.O. Box or virtual office mail drop.

 

 

 

 

 

Cash Now Pushers Cash Incentives | Illegal if Done By Insurance or Securities Brokers

by  Structured Settlement Watchdog

Members of the State of Florida Senate and House of Representatives are due to be descended upon by grumpy members of the National Association of Settlement Purchasers, non-affiliated cash now pushers and others opposed to  a pending bill that would set caps to discount rates used in structured settlement factoring transactions and attempt to eliminate forum shopping by requiring petitions for transfer be filed in the jurisdiction of residence as opposed to being filed anywhere in the State of Florida.  [ To wit, the Sumter County court house and the court room of Judge Michelle Morley has become, with respect to structured settlement transfers,  what could be described as a popular "circus" where cash now pushers ride in on their unicyles to get their "cotton candy"].

As I posted on March 3, 2014 in Sumter County Florida Structured Settlements Hurry Hurry Step Right Up":

"Nothing could be clearer about Sumter County Florida being a forum shopping venue of choice and the efforts of Sumter County to make it more attractive to cash now pushers:

Clerk of the Court Gloria R. Hayward's web page states at the time of publication of this post, "This is a special project undertaken by our Records Management and Technical Services staff to provide access to case types identified as Foreclosure or Structured Settlements. 

This has been done in an effort to improve public access to these bulk case types that have recently been a matter of excessive public inspection".

Its understandable why cash now pushers would be opposed to the bill because some would be out  of business in Florida, as they may have been in North Carolina when rates in that state were capped several years ago. For those with bloated business models,  that rely on financing and cannot obtain it at a cost that makes it economically efficient to operate within the proposed cap of 5 points over the prime rate, it presents a game changer. For those with a  high concentration of Florida business, who cannot adapt, it could cost them.

The question is what is best for consumers?  Wouldn't an interest rate cap benefit consumers?  Cash now pushers may argue that their un-capped discount rates are still more favorable than credit card rates, but regulators should ignore the syncophants and stay focused.

Let's talk about what the pending Florida bill fails to address and should  (among other things)...cash incentives and aggressive follow up on structured settlement annuitants that would be illegal, in FLORIDA if provided in connection with the placement of insurance or securities.

Cash now pushers scrape court records.  My information is that most of them do. Some cash now pushers do it directly, others hire people to to do it, or subscribe to services where they can obtain information on cases where legal actions have been settled in particular county courthouse.

Cash now pushers then use this information in aggressive ways to target structured settlement annuitants. One way is to send out checks as a cash advance, or notice of "rip off"  from official looking but phony government entities.  It's Pollyanna to believe that the secondary market can self regulate.  

The checks are followed up with phone calls aggressively "encouraging", possibly even harrassing the annuitant to cash them in an effort,  to tie up the annuitant. Some cash now pushers are falling all over themselves to offer the checks (we've seen a case where  stored value debit card was sent).

Consider a web page on the Einstein Structured Settlements website, which it has been observed typically draws traffic by employing a strategy of brandjacking competitors of its beneficiary, Fairfield Funding.

On one of its web pages, Einstein uses Seneca One's telephone number twice on the same page [much as it did with Peachtree-see Einstein Structured Settlements Unethical "Brandjacking" Continues], to promote its cash advance of $5,500 to compete with Seneca One's $5,000 cash advance.   Download 800-519-6031 Einstein SS uses Seneca One's Phone twice on same page 3-15-2014. If I licensed insurance agent did that in Florida in conjunction with the sale of an annuity it would violate the law.  There is one regulatory gap in need of closing!  The Einstein Structured Settlements phone number  888-497-0724  continues to resolve to Fairfield Funding and resolved to the personal voice mail of Rick Hazen, the Sales Manager for Atlanta based Fairfield Funding on March 15, 2014.

Be sure to watch part 1 and part 2 of my interview with Eddie Stone, of Edward Stone law, a former general counsel of JG Wentworth about the state of the structured settlement secondary market and how it can be improved, now up on our YouTube channel.

I look forward to observing the response of the National Structured Settlements Trade Association and its members as well as unassociated members of the structured settlement primary market to the Florida legislation.